Medication company Viatris (NASDAQ: VTRS) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 8.1% year on year to $3.52 billion. The company expects the full year’s revenue to be around $14.7 billion, close to analysts’ estimates. Its non-GAAP profit of $0.59 per share was 17.5% above analysts’ consensus estimates.

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Company Overview

Created through the 2020 merger of Mylan and Pfizer's Upjohn division, Viatris (NASDAQ: VTRS) is a healthcare company that develops, manufactures, and distributes branded and generic medicines across more than 165 countries worldwide.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Viatris grew its sales at a tepid 1.1% compounded annual growth rate. This fell short of our benchmarks and is a poor baseline for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Viatris’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2.6% annually.

This quarter, Viatris reported year-on-year revenue growth of 8.1%, and its $3.52 billion of revenue exceeded Wall Street’s estimates by 5.2%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.

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Adjusted Operating Margin

Viatris has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 29.1%.

Analyzing the trend in its profitability, Viatris’s adjusted operating margin decreased by 14.6 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 10.1 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

In Q1, Viatris generated an adjusted operating margin profit margin of negative 2.3%, down 27.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Viatris, its EPS declined by 9.2% annually over the last five years while its revenue grew by 1.1%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Viatris’s earnings to better understand the drivers of its performance. As we mentioned earlier, Viatris’s adjusted operating margin declined by 14.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q1, Viatris reported adjusted EPS of $0.59, up from $0.50 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Viatris’s Q1 Results

We were impressed by how significantly Viatris blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 2.4% to $15.58 immediately after reporting.

Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).